Sworn testimony in a recently concluded mortgage case may spell big trouble for Bank of America. If what one bank employee said proves to be accurate, paperwork problems at mortgage provider Countrywide could leave Bank of America on the hook for billions.
This week, the Congressional Oversight Panel recommended that the nation's big banks be stress tested again, because if problems with mortgage-backed securities are widespread, the consequences could be dire. Now, the Fed has agreed to run those tests, which it wouldn't do if it wasn't worried.
More mortgage investors appear to be joining the fight to force banks to buy back bad loans. These investors face big challenges in spite of their swelling ranks, as banks are understandably reluctant to pay.